Business briefs

Mortgage applications drop

Despite historically low interest rates, during the first week of February fewer Americans applied for mortgages to either buy a new home or refinance the one they live in, the Washington-based Mortgage Bankers Association (MBA) reported.

The lending trade group's Market Composite Index, which includes all forms of mortgage activity, declined by 6.8 percent to a seasonally adjusted level of 797.8 from 855.7 during the closing week of January.

On an unadjusted basis, the index was off by 4.5 percent from the week before, and down 26.5 percent from the same period last year.

Breaking the week's activity out by type of loan, the MBA said mortgage applications to buy a new home were down by 9.4 percent, while refinancing activity declined by 6.8 percent.

Refinancing accounted for 56.9 percent of all home loan activity during the week.

Wal-Mart raises $1.25 billion

Wal-Mart Stores Inc., the world's largest company, sold $1.25 billion worth of seven-year global notes in an offering that attracted strong investor interest.

The retailer originally planned a $750 million bond offering, but the high level of interest led the company and its underwriters to increase the size of the financing deal.

The offering was priced at 99.58, with a coupon of 4.125 percent, generating a yield of 4.195 percent. That represents a slight 54 basis-point spread over Treasury bonds, suggesting that investors rate Wal-Mart's credit worthiness virtually on a par with the U.S. government's.

The bond offering was jointly led by Goldman Sachs, Lehman Brothers and CSFB.

Residential remodeling closes 2003 on a high note

Professional remodelers said they put up higher year-end numbers during the final quarter of 2003 than in any fourth quarter of the past two years, raising expectations for a strong start to the new year.

"We anticipate that when the final numbers are tallied, the 2003 market will close at $182 billion, surpassing last year's $173 billion by about 5 percent," said Doug Sutton, chairman of the Remodelers' Council of the National Association of Home Builders (NAHB), a Washington-based trade group.

"It has been a banner year for the remodeling industry as a whole, and we feel very good about our businesses as we move into the new year," added Sutton.

The Remodeling Market Index is based on a quarterly canvass of 565 remodelers, and combines two separate gauges: current market conditions and near-term expectations.

The index measuring current conditions advanced by 7.1 points, to a reading of 50.3, up from 43.2 last year. The future index climbed even faster, jumping up by 9.2 points, to 48.3 from last year's reading of 39.1

"The year-over-year gains in both indexes hold true for every region across the board, indicating the continued strength of the market," said David Seiders, chief economist of the NAHB.

"What's more," he added, "substantial year-over-year gains are apparent for every single component of the future expectations index — including calls for bids and amount of work committed for the next three months for both owner- and renter-occupied dwellings, plus overall job backlogs and appointments for proposals."